Tag Archives: shareholders

Fannie & Freddie Shareholders Want Billions

HOUSTON (CN) — Shareholders have sued the Department of the Treasury and the Federal Housing Finance Agency, claiming their $195 billion “net worth sweep” of Fannie Mae and Freddie Mac in 2012 illegally sent all their dividends to the U.S. Treasury rather than shareholders.
The Federal National Mortgage Association (Fannie Mae), and The Federal Home Loan Mortgage Corporation (Freddie Mac), are government-sponsored private companies that own or guarantee trillions of dollars in U.S. home loans. They buy home loans from banks, freeing up the banks to issue more home loans.
After the financial crisis began in late 2007, as the value of securitized home loans collapsed, Congress in July 2008 passed the Housing and Economic Recovery Act of 2008, under which Fannie and Freddie received a $188 billion government bailout.
The Act also created the Federal Housing Finance Agency and authorized it to appoint itself conservator of the companies, which it did in September 2008.
Lead plaintiff J. Patrick Collins a Freddie Mac stockholder, filed the lawsuit on Oct. 20 in Federal Court.

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Wells Fargo hit with shareholder class action lawsuit over sales practices

A shareholder class action lawsuit was filed against Wells Fargo & Co on Monday that alleged the firm misled investors about its financial performance and the success of its sales practices.

Wells Fargo, the United States’ third-largest bank by assets, agreed to pay $190 million earlier this month to settle regulatory charges that some of its employees opened as many as 2 million accounts without customers’ knowledge, in order to meet sales targets.

Robbins Geller Rudman & Dowd LLP announced the lawsuit and is seeking class action status on behalf of buyers of the company’s shares between Feb. 26, 2014 and Sept. 15, 2016.

The lawsuit, which was filed in the U.S. District Court of Northern California, comes nearly a week after Wells Fargo chief executive John Stumpf faced U.S. Senate lawmakers about his oversight at the bank.

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We Must Protect Shareholders From Executive Wrongdoing! Eric Ben-Artzi, Deutsche & the SEC

I know I did the right thing, Mr. Eric Ben-Artzi told several newspapers this last week (FTand Bloomberg).
He writes, “I turned down a whistleblower award.” Former Deutsche Bank employee and whistleblower, Eric Ben-Artzi turned down a whistleblower award of $8.25 million. “I refuse to take my share,” he said.  “Although I need the money now more than ever, I will not join the looting of the very people I was hired to protect. I never intended to turn a job in risk management into a crusade, but after suffering at the hands of Deutsche executives, I will not join them simply because I cannot beat them.”
He continues, “I request that my share of the award be given to Deutsche and its stakeholders and the award money clawed back from the bonuses paid to the Deutsche executives, especially the former top SEC attorneys.” Mr. Ben-Artzi says that the USD $55 million U.S. Securities and Exchange Commission (SEC) penalty which the award is based upon should have been paid by Deutsche executives.
A powerful gesture. One that hopefully will cause people to pay attention to the malfeasance underlying the whole 2008 financial debacle. My hat’s off to Mr. Ben-Artzi.  I applaud his stance.

Federal court tosses #Fanniegate suit seeking to inspect Freddie Mac’s records

In what is already being called a “blow to shareholders,” by John Carney of the Wall Street Journal, a federal court in Virginia ruled Tuesday that a Freddie Macshareholder does not have the right to inspect the government-sponsored enterprise’s financial records, thanks to the conservatorship agreements that went into effect when the government took over Freddie Mac and Fannie Mae.

The United States District Court for the Eastern District of Virginia tossed out a lawsuit brought against Freddie Mac by Tim Pagliara, who sought to review the GSE’s books in an attempt to prove that the government is illegally taking the profits of Freddie Mac and Fannie Mae from shareholders.

Pagliara is the CEO of CapWealth Advisors, the leader of Investors Unite, an organization that seeks to protect the rights of all the investors that own shares in Fannie and Freddie, and a prominent member of “#FannieGate”, a viral movement on Twitter that has become shorthand for the government’s supposed theft of Fannie and Freddie.

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Whistleblower Rejects Award to Protest SEC and Wall Street’s “Looting”

What guts!

‘After suffering at the hands of the Deutsche [Bank] executives I will not join them simply because I cannot beat them’

A Deutsche Bank whistleblower rejected his portion of a $16.5 million award for exposing corporate crime because the Securities and Exchange Commission (SEC) let bank officials off the hook, he said Thursday.

Former risk manager Eric Ben-Artzi, who went to federal authorities in 2010 after he was fired from Deutsche Bank for alerting its officials of improper accounting, said the bank and the SEC were so deeply entwined in a revolving-door culture that commissioners refused to properly investigate the firm’s top executives.

“This goes beyond the typical revolving door story. In this case, top SEC lawyers had held senior posts at the bank, moving in and out of top positions at the regulator even as the investigations into malfeasance at Deutsche were ongoing,” Ben-Artzi wrote in an op-ed for the Financial Times.

Instead, the punishment fell on the bank’s rank-and-file employees, he said, with the SEC imposing a perfunctory $55 million fine on the institution that sent the shareholders and workers out the door and left top executives untouched.

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Freddie Mac must face revived lawsuit over risk disclosures


A federal appeals court on Wednesday revived a lawsuit accusing Freddie Mac and several former top officials of defrauding shareholders by concealing its subprime mortgage exposure and its inadequate risk management prior to the 2008 financial crisis.

The 6th U.S. Circuit Court of Appeals said a lower court judge erred in concluding that the Ohio Public Employees Retirement System did not sufficiently allege that its losses were caused by Freddie Mac’s disclosure shortfalls.

Fed Approves Bank of America’s Plan To Return $8 Billion To Shareholders

Earlier this week, the Federal Reserve unconditionally approved Bank of America’s 2016 capital return plan as a part of its annual stress test for the country’s biggest banks (see Lots Of Winners In The Fed’s 2016 Stress Test, But Deutsche Bank, Santander Stumble Again). Following the approval, the diversified banking giant announced plans to hike its quarterly dividends 50% from 5 cents now to 7.5 cents beginning Q3 2016. [1] The bank will also repurchase $5 billion worth of its common shares over the next four quarters.

Notably, Bank of America had only managed to secure a conditional clearance of its capital plan last year as the Fed took note of “weaknesses in certain aspects of Bank of America’s loss and revenue modeling practices and in some aspects of the BHC’s internal controls.” The fact that the bank admitted to an error in its capital ratio calculation in April 2014 played a role in the conditional clearance, but the fact that things went well with the regulator this time indicate that Bank of America has gotten things in order since then.

Given the bank’s roughly 10.3 billion outstanding shares, the 2016 capital plan entails a payout of just over $8 billion to investors over Q3 2016 – Q2 2017. We maintain our price estimate for Bank of America’s stock at $18.50. While our price target is about 40% higher than the current market price, the primary reason for this is the sharp sell-off in bank shares over recent months in anticipation of the U.K. leaving the European Union as key economic indicators point to weak growth figures in the near future.

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